Currency: Rupee recovers against dollar

KARACHI: The rupee ended firmer on Monday amid a lack of import payments, but dealers expect it to come under pressure following an increase in international oil prices. The rupee closed at 90.85/90 to the dollar, compared to its close on Friday of 90.98/91.04. The State Bank of Pakistan warned last month that financing the country’s projected current account deficit would be a challenge and kept the policy rate unchanged at 12 per cent. The deficit is expected to widen further in the coming months because of debt repayments and a lack of external aid. Dealers said they were also cautious after the International Monetary Fund advised Pakistan to take immediate steps to tackle growing budget pressures and raise interest rates to contain inflation. In the money market, overnight rates were unchanged at their top level of 11.90 per cent amid tight liquidity in the interbank market.

Published in The Express Tribune, March 6^th, 2012.